Alternative Investments Enjoy Successful First Quarter

by Carla Johnson, Investors Offshore.com

21 April 2006

The average hedge fund gained just under 1.9% in the month of March as hedge funds enjoyed one of their most profitable first quarters, according to CogentHedge, the hedge fund database.

With over 3,100 alternative investments reporting results for the month of March 2006, the average hedge fund has gained 1.866%, CogentHedge reported in its monthly newsletter. It is the fifth consecutive positive month for alternative investments in general.

The average hedge fund is up 5.249% for the year to date.

Privately-placed securities investment strategies posted the greatest gains for the month, according to Cogent.

Only three strategies - currency trading, fixed income and equity income strategies - posted declines in March.

Year-to-date, regulation D strategies have made the most significant gains, returning 15.781%. Strategic block/activist (13.414%), emerging market equity (12.071%), and opportunistic trading strategies (10.491%) have also made impressive gains year-to-date.

CogentHedge also tracks the leading service providers to the alternative investment industry worldwide. According to its most recent league tables, Citco has the largest market share of hedge fund administration with 12.84% of the market. Citco is followed by HSBC (11.32%) and BISYS (7.8%).

The largest hedge fund auditor is PricewaterhouseCoopers with a 26.3% share of the market, followed by Ernst & Young with 20.89% and KPMG with 16.46%.

Goldman Sachs is the leading Prime Broker to the hedge fund industry with a 21.3% share of the market. Morgan Stanley has the second largest share with 19.07% of the market, and Bear Stearns is third with 12.12%.

Stewart & Kissel LLP was ranked first among legal counsel with a 10.43% share of the market. Maples & Calder is the leading offshore counsel with 23.25% market share, followed by Walkers (17.03%) and Ogier (6.53%).

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